IBM and Vanguard Explore Quantum Computing for Portfolio Optimization
IBM and Vanguard are collaborating to leverage quantum computing for investment portfolio construction. Traditional models like Markowitz face limitations due to unrealistic assumptions, while real-world scenarios involve complex constraints. The partnership focuses on hybrid quantum-classical approaches, specifically variational quantum algorithms (VQAs), to solve these challenges efficiently.
VQAs combine short quantum circuits with classical optimization, enabling practical implementation on existing hardware. This method shows promise in handling large-scale portfolios with thousands of assets and multiple constraints, outperforming classical techniques in early tests. The initiative could redefine risk-return optimization in asset management.
